VAT zones

Creating VAT and non-VAT delivery zones

If you are selling your products/services to a country where you don’t need to charge VAT you can specify for each delivery zone or delivery country that you create in your account’s delivery pricing system whether or not VAT should be charged.

You can make this selection when creating your delivery zones. To do this select Checkout > Delivery Rates from the menu. Once you have added a zone to your list of delivery zones, scroll down to it and use the ‘Charge VAT’ tick box to determine if VAT should be charged (on the products ordered and on the delivery charges) when a customer selects that delivery zone:

Place a tick in the box to charge VAT. Untick/leave the box empty if you do not want to charge VAT in that zone.

Once you have made a change, check on your website that it is working properly. When a non-VAT delivery zone is selected from the drop-down list, VAT should be removed from the price of the products.

Changing the VAT rate in VAT zones

By default each delivery zone that you have determined to be a VAT zone will use the VAT rate configured in your VAT settings (which is either the default VAT rate for your location or the VAT rate that you manually configured to be used for all VAT charges). You can, however, manually change the VAT rate in each of your VAT delivery zones if you want the VAT rate to be different for a specific location.

To change the VAT rate for a delivery zone select Configure VAT settings on the delivery zone you want to change:

Enter your custom VAT rate in the ‘VAT Rate’ field:

Then select save changes.

Setting a VAT threshold in VAT zones

For each of your VAT delivery zones you can set a VAT threshold, based on order value, for when VAT would be charged on orders that use that delivery zone. If an order total (excluding VAT) is above the set threshold VAT would not be charged. For example, if you set a threshold of €150 and an order total (excluding VAT) came to €145, VAT would be charged, but if the order total came to €160 VAT would not be charged.

It is not mandatory to set VAT thresholds. Any VAT delivery zone where a threshold is not set will charge VAT on every order.

To set a VAT threshold on a delivery zone select Configure VAT settings on that delivery zone:

Enter the starting order value at which VAT should not be charged on orders that use that delivery zone:

Any VAT threshold that you create will be set in the currency for that delivery zone. The system will then convert that number to the currency of the base location of your account to check against each order. The system will then decide based on the value of the order whether or not to charge VAT.

For orders that have selected a delivery zone where a threshold has been set, you can see in the order details an explanation of whether or not the customer was charged VAT along with the currency conversion rate that was used for the order: